Generational Poverty

Jul-2018

GENERATIONAL POVERTY

The crimes of slavery were not just moral failures, they’re also a profound and ongoing issue of economics.

“In order to get a true sense of how much wealth the South held in bondage, it makes far more sense to look at slavery in terms of the percentage of total economic value it represented at the time. And by that metric, it was colossal. In 1860, slaves represented about 16 percent of the total household assets—that is, all the wealth—in the entire country, which in today’s terms is a stunning $10 trillion.

Ten trillion dollars is already a number much too large to comprehend, but remember that wealth was intensely geographically focused. According to calculations made by economic historian Gavin Wright, slaves represented nearly half the total wealth of the South on the eve of secession. ‘In 1860, slaves as property were worth more than all the banks, factories and railroads in the country put together,’ civil war historian Eric Foner tells me. ‘Think what would happen if you liquidated the banks, factories and railroads with no compensation.’” -Chris Hayes

“Today’s racial wealth divide is an economic archaeological marker, embedded within the multi-generational story of slavery, racial plunder, and discrimination. It is one way the legacy of racism shows up in peoples bank accounts and, if they own a home, in home equity. It is where the past is present, where the wound at the center of US history that goes back to the destruction of indigenous communities, slavery, and Jim Crow is still open and waiting for repair. Notably, the past few decades have ‘supercharged’ historic racial wealth inequalities….

Imagine that after playing poker for an hour, we discover that we’ve been playing with a rigged deck—and that for each hand dealt, a couple of us have gotten extra cards, based on something entirely arbitrary such as the color of our eyes or sweaters. Naturally, the beneficiaries of the stacked deck have accumulated big winnings. We all heartily agree to a clean start with a new deck and fair rules. But as the dealer begins shuffling the new deck, one of the players raises an awkward question: ‘What do we do about that huge pile of chips that a few of you have accumulated?’

…In the case of racial economic divisions, the full horror of dispossession remains difficult to grasp. In 1965, a century after the formal end of slavery, African-Americans were still largely excluded from programs that helped build middle-class wealth. In the decades following World War II, our nation made unprecedented public investments to subsidize debt-free college education and low-cost mortgages. But these wealth-building measures benefited millions of mostly white households. People of color, meanwhile, faced overt discrimination in mortgage lending and separate-and-unequal school systems throughout the United States. Barred from traditional forms of credit, African Americans were pushed into wealth-stripping mortgage scams like “contract for deed” mortgages, where a missed payment would lead to evection and loss of all equity.

So while many whites were able to board an Express train to middle-class wealth between 1945 and 1975, people of color were left standing at the railway station for a train that never showed up.” – Chuck Collins

“Not only was wealth accumulation the driving force behind chattel slavery, but Black Americans have been economically exploited and undermined ever since abolition.” –Safety Pin Box

“Plunder in the past made plunder in the present efficient. The banks of America understood this. In 2005, Wells Fargo promoted a series of Wealth Building Strategies seminars. Dubbing itself ‘the nation’s leading originator of home loans to ethnic minority customers,’ the bank enrolled black public figures in an ostensible effort to educate blacks on building generational wealth. But the ‘wealth building’ seminars were a front for wealth theft. In 2010, the Justice Department filed a discrimination suit against Wells Fargo alleging that the bank had shunted blacks into predatory loans regardless of their creditworthiness. This was not magic or coincidence or misfortune. It was racism reifying itself. According to TheNew York Times, affidavits found loan officers referring to their black customers as ‘mud people’ and to their subprime products as ‘ghetto loans.’

‘We just went right after them,’ Beth Jacobson, a former Wells Fargo loan officer, told TheTimes. ‘Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.’

In 2011, Bank of America agreed to pay $355 million to settle charges of discrimination against its Countrywide unit. The following year, Wells Fargo settled its discrimination suit for more than $175 million. But the damage had been done. In 2009, half the properties in Baltimore whose owners had been granted loans by Wells Fargo between 2005 and 2008 were vacant; 71 percent of these properties were in predominantly black neighborhoods.” -Ta Nehisi Coates

“Please understand the difference between ‘not having room in your budget’ and actually being broke. A situation like [an accidental bank overdraft] can completely destabilize an entire family. This can result in not being able to pay other bills and having your lights turned off, not being able to wash your children’s clothes for school, not having gas to even go to work, pay for daycare, etc. Minor financial inconveniences for middle class/white people can be completely life-shattering for Black people.

So while one may budget to give reparations, giving exactly the amount that keeps everything in your life comfortable, Black folks give to each other when we barely have anything to give. Can you imagine having NOTHING in your savings? No credit cards? No 401k? No line of credit? And no one to borrow from? Can you imagine $70 being the difference between literal food and shelter and being houseless with your children?”

-Imani Inami

“One of the hardest jobs anyone can have is the job of being poor. To survive from day to day is an epic struggle to find a way to feed yourself, clothe yourself, put a roof over your head. It is the most Herculean path when you have nothing.” –Lynn Nottage

“The median net worth for non-immigrant African-American households in the Greater Boston region is $8, according to ‘The Color of Wealth in Boston,’ a 2015 report by the Federal Reserve Bank of Boston, Duke University, and the New School….

The household median net worth was $247,500 for whites; $8 for US blacks (the lowest of all five cities); $12,000 for Caribbean blacks; $3,020 for Puerto Ricans; and $0 for Dominicans.” –Akilah Johnson

“If you’re scraping by on $15,000 a year, every dollar you save comes at the expense of something essential – food, rent, clothing, heat or payments on the car used to get to work. Since white Americans, on average, earn more than black Americans, we’d expect them to have higher savings rates even without being more frugal.” -Noah Smith

“White Americans have a tendency to whitewash and deliberately downplay the reality and gravity of their past and present sins. Slavery is regarded as a minor error within the great tapestry of brutality, despite its long-lasting, systemic and ever-present effects. White people are simultaneously fascinated by slavery-era history and deeply scared of admitting how much they still benefit from generational wealth and privilege from as far back as 400 years ago. Slavery allowed land-owning, slave-owning whites to accumulate massive amounts of wealth while racking up major savings on labor costs (some economists estimate the value of slave labor to be as much as $14 trillion). This money was passed down for generations, while the descendants of enslaved people are still suffering from the effects of slavery and Jim Crow laws.” –Laura Witt

“The widening wealth gap in the United States is a worrisome sign that millions of families nationwide do not have enough in assets to offer better opportunities for future generations. Wealth allows families to make investments in homes, in education, and in business creation. On the basis of data collected using the National Asset Scorecard for Communities of Color (NASCC) survey, we report that, when analyzed by race, wealth accumulation is vastly unequal.” -The Color of Wealth in Boston: A Joint Publication of Duke University, The New School, and the Federal Reserve Bank of Boston.

“A [white] Millennial who gets regular financial gifts and support from parents will either have the money to cover an emergency themselves, or (more likely) have a parent or grandparent cover it so there’s no damage to their credit. They won’t have to borrow from predatory lending institutions, move into unsafe neighborhoods to save on rent, or start from financial scratch each time.”

“There are many different types of privilege, not just skin-color privilege, that impact the way people can move through the world or are discriminated against. These are all things you are born into, not things you earned, that afford you opportunities that others may not have.” –Gina Crosley-Corcoran

“If you’re wondering why people are poor, it’s not because of themselves, it’s because poverty is a result of our capitalist system that empowers a small group to take so much and leaves the rest of us scraping for crumbs. 99% of the population is fighting for 18% of the wealth our nation made last year. Consider all that this means for everyone, and especially for people who don’t pursue wealth first, but instead pursue their passions, or their purpose, or justice….Yes, people are lazy, but that’s not why they’re poor. There are plenty of lazy people in the 1%. And not one person in that group worked hard enough to EARN that much wealth since that’s IMPOSSIBLE.” -YahNe Ndgo

“And how is one to move up from the lower [economic] group to the higher one? Education is key, Temin writes, but notes that this means plotting, starting in early childhood, a successful path to, and through, college. That’s a 16-year (or longer) plan that, as Temin compellingly observes, can be easily upended. For minorities especially, this means contending with the racially fraught trends Temin identifies earlier in his book, such as mass incarceration and institutional disinvestment in students, for example.

Many cities, which house a disproportionate portion of the black (and increasingly, Latino) population, lack adequate funding for schools. And decrepit infrastructure and lackluster public transit can make it difficult for residents to get out of their communities to places with better educational or work opportunities.” –Gillian B White